GIFT TAX PLANNING/GIFT TAX PREPARATION

There can be advantages for making lifetime gifts to members of your family, rather than waiting to bequeath the property under your will.

We hasten to note that we do not advocate the gifting of assets during our clients lifetime over transferring them at death. A Gift and an Estate plan must be crafted for each client since the facts and circumstances of each family is unique only to that family.

We meet with our clients to prepare a customized estate and gift plan that fit their family and financial profile. We ask for facts before suggesting courses of action. We ensure that our clients understand the Gifting and Estate systems before they make a final decision on their plan.

When required, we prepare the Gift Tax returns of our clients.

We provide written estimates of our Gift Tax services before starting to work on an engagement. Please call us for additional information.

Please remember, gifting is not a universal tax reduction technique for every family. As a matter of fact, we recommend gifting only to a small number of our clients!

Please call us for additional information.

 

Saving Taxes by Making Gifts

The privilege of gratuitously transferring property to another is subject to transfer tax under the Gift Tax and/or Estate Tax system of taxation.

The transfer tax takes the form of gift tax for lifetime transfers and estate tax for transfers at death.

Although the gift and estate taxes are imposed at the same tax rate, the way in which they are computed makes a significant difference in the amount of tax ultimately paid for the privilege of transferring the property. Please note: use of the lifetime Gift Tax exclusion reduces, dollar for dollar, the Estate Tax exclusion.

As stated earlier, there can be a transfer tax advantage to making lifetime gifts, rather than transferring the property under a will. The reason for this favorable treatment of gifts is that the gift tax is imposed on a “tax-exclusive” basis, while the estate tax is imposed on a “tax-inclusive” basis. In essence, the gift tax is imposed only on the value of the gift, while the estate tax is imposed both on the value of the gift and on the funds used to pay the tax on the gift.

The estate tax/gift tax law changes in recent years makes planning challenging for tax purposes. Please call us for additional information.

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